Within this section

Terminology

A

The AECO-C is a virtual trading point that sets the main pricing index for Albertan and Canadian natural gas.

AECO-C Price

The Natural Gas Exchange (NGX) volume-weighted average of transacted prices at the Alberta Nova Inventory Transfer (ABNIT) market centre for all delivered natural gas in a calendar month.

Alberta Market Price (AMP)

The Natural Gas Exchange (NGX) Alberta Market Price is a volume-weighted average of transacted prices at the Alberta Nova Inventory Transfer (ABNIT) market centre for all physically delivered natural gas in a calendar month.

Alberta Natural Gas Reference Price (ARP)

A monthly weighted average field price of all Alberta gas sales that is used for royalty purposes. The price is determined by the Alberta Department of Energy through a survey of actual sales transactions. Also known as the price of Alberta natural gas at the plant gate.

API gravity

A specific gravity scale developed by the American Petroleum Institute (API) for measuring the relative density or viscosity of various petroleum liquids.

B

Brent Blend (Brent)

A grade of light sweet crude oil derived from a mix of 15 different oil fields in the North Sea. Brent blend futures are traded on the Intercontinental Exchange Inc. (ICE) and are considered a global benchmark for oil prices.

brownfield

Brownfield projects are projects built where land has previously been developed or where there is room to expand an existing facility.

burner-tip

The location where a fuel is used by a consumer.

butanes

In addition to its normal scientific meaning, a mixture mainly of butanes that ordinarily may contain some propane or pentanes plus (Oil and Gas Conservation Act, section 1(1)(j)).

C

Expenditures by a company to build, purchase, or upgrade physical assets such as land, equipment, and processing facilities.

clean coal

Clean coal is coal that has been processed for export by washing raw coal to remove soil and rock sediment. While subbituminous coal is burned without any form of upgrading, both metallurgical and thermal bituminous coal are sent in raw form to a preparation plant to be processed into clean coal. On average, about 65 per cent of raw metallurgical bituminous coal and less than 50 per cent of raw thermal bituminous coal is recovered as clean coal in Alberta. Subbituminous raw coal and both types of clean bituminous coal are collectively known as marketable coal.

coal

A combustible sedimentary rock that contains at least 50 per cent by weight organic matter formed from plant or algal matter. (Coal Conservation Act, section 1(1)(d)).

coalbed methane (CBM)

Naturally occurring dry gas, predominantly methane, produced during the transformation of organic matter into coal.

coal seam

A layered unit of coal and inorganic matter that contains less than 1/3 inorganic matter by volume and does not contain a layer of inorganic matter exceeding 0.3 metres in thickness (Coal Conservation Act, section 1(1)(e.1)).

cogeneration gas plant

A gas-fired plant used to generate both electricity and steam.

commingled

Commingled flow describes the production of fluid from two or more separate zones through a single conduit.

compressibility factor

A correction factor for non-ideal gas determined for gas from a pool at its initial reservoir pressure and temperature and, where necessary, includes factors to correct for acid gases.

condensate

A mixture mainly of pentanes and heavier hydrocarbons that may be contaminated with sulphur compounds, that

is recovered or is recoverable at a well from an underground reservoir and may be gaseous in its virgin reservoir state but is liquid at the conditions under which its volume is measured or estimated, or

is recovered from an in situ coal scheme and is liquid at the conditions under which its volume is measured or estimate (Oil and Gas Conservation Act, section 1(1)(k)).

crude bitumen

A naturally occurring viscous mixture, mainly of hydrocarbons heavier than pentane, that may contain sulphur compounds and that, in its naturally occurring viscous state, will not flow to a well (Oil Sands Conservation Act, section 1(1)(c)).

crude oil (conventional)

A mixture mainly of pentanes and heavier hydrocarbons that may be contaminated with sulphur compounds, that is recovered or is recoverable at a well from an underground reservoir and that is liquid at the conditions under which its volume is measured or estimated, and includes all other hydrocarbon mixtures so recovered or recoverable except raw gas, condensate, or crude bitumen (Oil and Gas Conservation Act, section 1(1)(o)).

crude oil (heavy)

Crude oil with a density of 900 kg/m3 or greater.

crude oil (light)

Crude oil with a density of 850 kg/m3 or less.

crude oil (light–medium)

Crude oil with a density less than 900 kg/m3.

crude oil (medium)

Crude oil with a density equal to 850 kg/m3 and less than 900 kg/m3.

crude oil (ultra-heavy)

Crude oil with a density of 925 kg/m3 or greater.

crude oil (synthetic)

A mixture, mainly of pentanes and heavier hydrocarbons, that may contain sulphur compounds, and is derived from crude bitumen and that is liquid at the conditions under which its volume is measured or estimated, and includes all other hydrocarbon mixtures so derived (Oil and Gas Conservation Act, section 1(1)(zz)).

crude oil netback

An economic indicator of profitability expressed as a dollar value per unit of production. Crude oil netbacks are calculated from the price of West Texas Intermediate (WTI) crude oil at Chicago less transportation and other charges to supply crude oil from the wellhead to the Chicago market. Alberta netback prices are adjusted for the U.S./Canadian dollar exchange rate, as well as crude quality differences.

cyclic steam stimulation (CSS)

A technique that produces bitumen by injecting steam into underground oil sands reservoirs (i.e., wells) to heat bitumen, separate it from the sand, and allow it to flow to the well and be produced.

The density relative to air of raw gas upon discovery, determined by an analysis of a gas sample representative of a pool under atmospheric conditions.

development entity (DE)

An administrative unit consisting of multiple formations in a designated area described in an order of the AER. Within the DE gas may be produced without segregation in the wellbore, subject to certain criteria specified in section 3.051 of the Oil and Gas Conservation Rules.

diluent

Lighter viscosity petroleum products that are used to dilute crude bitumen for transport in pipelines.

discovery year

The year when drilling was completed for the well in which the oil or gas pool was discovered.

drain wells

More than one event sequence (leg) in a multileg well is open to the same pool and is capable of production. The event sequence considered to be the main contributor of production carries the producing status. The other contributing events carry a drain status.

E

Ratio of waste (overburden material that covers mineable ore) to ore (coal or oil sands) used to define an economic limit below which it is economical to remove the overburden to recover the ore.

enhanced recovery

The increased recovery from a pool achieved by artificial means or by the application of energy extrinsic to the pool, which artificial means or application includes pressuring, cycling, pressure maintenance or injection to the pool of a substance or form of energy, but does not include the injection in a well of a substance or form of energy for the sole purpose of
(i) aiding in the lifting of fluids in the well, or
(ii) stimulation of the reservoir at or near the well by mechanical, chemical, thermal or explosive means (Oil and Gas Conservation Act, section 1(1)(r)).

established reserves

Those reserves recoverable under current technology and present and anticipated economic conditions specifically proved by drilling, testing, or production, plus the portion of contiguous recoverable reserves that are interpreted to exist from geological, geophysical, or similar information with reasonable certainty.

ethane

In addition to its normal scientific meaning, a mixture mainly of ethane that ordinarily may contain some methane or propane (Oil and Gas Conservation Act, section 1(1)(s)).

F

feedstock

A raw material supplied to a refinery, oil sands upgrader, or petrochemical plant.

field

(i) The general surface area or areas underlain or appearing to be underlain by one or more pools, or
(ii) the subsurface regions vertically beneath a surface area or areas referred to in subclause (i) (Oil and Gas Conservation Act, section 1(1)(x)).

field (gas) plant

A natural gas facility that processes raw gas and produces a marketable product that meets pipeline specifications. These plants, located near the gas source, remove impurities, such as water and hydrogen sulphide, from the raw gas stream and may also extract natural gas liquids. See alsoNGL recovery (extraction plant).

field plant gate

The point at which the gas exits the field plant and enters a pipeline.

G

gas

Raw gas, synthetic coal gas or marketable gas or any constituent of raw gas, synthetic coal gas, condensate, crude bitumen or crude oil that is recovered in processing and that is gaseous at the conditions under which its volume is measured or estimated (Oil and Gas Conservation Act, section 1(1)(y)).

gas (associated)

Gas in a free state in communication in a reservoir with crude oil under initial reservoir conditions.

gas (dry)

Raw or processed gas that contains little to no natural gas liquids.

gas (liquids-rich)

Raw gas that contains a relatively high concentration of natural gas liquids.

gas (marketable)

A mixture mainly of methane originating from raw gas, if necessary through the processing of the raw gas for the removal or partial removal of some constituents, and that meets specifications for use as a domestic, commercial or industrial fuel or as an industrial raw material (Oil and Gas Conservation Act, section 1(1)(ee)). Marketable gas is measured at standard conditions of 101.325 kPa and 15°C.

gas (nonassociated)

Gas that is not in communication in a reservoir with an accumulation of liquid hydrocarbons at initial reservoir conditions.

gas (raw)

A mixture containing methane, other paraffinic hydrocarbons, nitrogen, carbon dioxide, hydrogen sulphide, helium and minor impurities, or some of them, that is recovered or is recoverable at a well from an underground reservoir and is gaseous at the conditions under which its volume is measured or estimated (Oil and Gas Conservation Act, section 1(1)(tt)).

gas (solution)

Gas that is dissolved in crude oil under reservoir conditions and evolves as a result of pressure and temperature changes.

gas (sour)

Natural gas that contains hydrogen sulphide in excess of 0.01 per cent.

gas (wet)

Raw or processed gas that contains natural gas liquids.

gas-oil ratio (initial solution)

The volume of gas (in cubic metres, measured under standard conditions) contained in one stock-tank cubic metre of oil under initial reservoir conditions.

good production practice (GPP)

Production of crude oil or raw gas at a rate

not governed by a base allowable, but

limited to what can be produced without adversely and significantly affecting conservation, the prevention of waste, or the opportunity of each owner in the pool to obtain his share of production (Oil and Gas Conservation Rules, section 1.020(2)9). This practice is authorized by the AER either to improve the economics of production from a pool and thus defer its abandonment or to avoid unnecessary administrative expense associated with regulation or production restrictions where this serves little or no purpose.

greenfield

Greenfield projects are projects built on land that has not previously been used and has no existing components or structures.

gross heating value (of dry gas)

The heat liberated by burning moisture-free gas at standard conditions and condensing the water vapour to a liquid state.

H

Henry Hub

A distribution hub on a main natural gas pipeline system in the United States near Erath, Louisiana. It is the pricing point for natural gas futures contracts traded on the New York Mercantile Exchange (NYMEX).

horizontal well

A well in which the lower part of the wellbore is drilled parallel to the zone of interest.

hydraulic fracturing

Hydraulic fracturing is the process of pumping fluid into a wellbore to create enough pressure to crack, or fracture, the rock layer. The fluid usually contains a “proppant,” like sand, that helps keep the fractures open to allow oil and gas to be produced to the well.

hydraulic multistage fracturing

The application of hydraulic fracturing over multiple segments within a well leg, starting at the “toe,” or near-end point of the drilling leg, and moving backwards to the “heel,” or vertical portion of the well leg.

M

marketable bitumen

Upgraded and nonupgraded bitumen available to be used as refinery feedstock.

maximum day rate

The operating day rate for gas wells when they are first placed on production. The estimation of the maximum day rate requires the average hourly production rate. For each well, the annual production is divided by the hours that the well produced in that year to obtain the average hourly production for the year. This hourly rate is then multiplied by 24 hours to yield an estimate of a full-day operation of a well, which is referred to as the maximum day rate.

maximum recoverable thickness

The assumed maximum operational reach of underground coal mining equipment in a single seam.

mean formation depth

The approximate average depth below kelly bushing of the midpoint of an oil or gas productive zone for the wells in a pool.

methane

In addition to its normal scientific meaning, a mixture mainly of methane that ordinarily may contain some ethane, nitrogen, helium, or carbon dioxide (Oil and Gas Conservation Act, section 1(1)(ff)).

multilateral well

A well where two or more production holes, usually horizontal in direction with reference to the zone of interest, are drilled from a single surface location.

A natural gas processing facility that can remove natural gas liquids from raw or processed natural gas. Extraction plants can remove an NGL mix, but cannot split the natural gas liquids into separate components. See also

A reprocessing plant on major natural gas transmission lines near Alberta’s borders that extracts natural gas liquids from marketable gas. Most plants are deep-cut facilities that then ship an NGL stream to fractionation plants in central Alberta.

nonupgraded bitumen

Nonupgraded bitumen refers to crude bitumen that is blended with a lighter-viscosity product (referred to as a diluent) to meet specifications for transport through pipelines.

O

off-gas

Natural gas produced from upgrading bitumen. This gas is typically rich in natural gas liquids and olefins.

oil

Condensate, crude oil, or synthetic coal liquid or a constituent of raw gas, condensate, or crude oil that is recovered in processing, that is liquid at the conditions under which its volume is measured or estimated (Oil and Gas Conservation Act, section 1(1)(hh)).

the crude bitumen contained in those sands and other rock materials, and

any other mineral substances, other than natural gas, in association with that crude bitumen or those sands and other rock materials referred to in subclauses (i) and (ii) (Oil Sands Conservation Act, section 1(1)(l)).

oil sands areas

For administrative purposes, the geological formations and the geographic areas in Alberta that contain bitumen are designated as oil sands areas. The three oil sands areas are the Athabasca, Cold Lake, and Peace River oil sands areas.

oil sands deposit

A natural reservoir containing or appearing to contain an accumulation of oil sands separated or appearing to be separated from any other such accumulation (Oil and Gas Conservation Act, section 1(1)(jj)).

operating costs

Includes both fixed and variable costs associated with running a project on a day-to-day basis.

overburden

When used in reference to mining, overburden is the thickness of the material above a mineable occurrence of coal or bitumen; otherwise, it is the soil and loose material between the land’s surface and solid bedrock.

overnight rate

The overnight rate is the interest rate at which major financial institutions borrow and lend one-day (or “overnight”) funds among themselves; the Bank of Canada sets a target for that rate. This target for the overnight rate is often referred to as the bank’s key interest rate or key policy rate.

P

pay thickness (average)

The bulk rock volume of a reservoir of crude oil, bitumen, or gas divided by its area.

pentanes plus

A mixture mainly of pentanes and heavier hydrocarbons that ordinarily may contain some butanes and that is obtained from the processing of raw gas, condensate or crude oil (Oil and Gas Conservation Act, section 1(1)(mm)).

pool

a natural underground reservoir containing or appearing to contain an accumulation of oil or gas, or both, separated or appearing to be separated from any other such accumulation, or

in respect of an in situ coal scheme, that portion of a coal deposit that has been or is intended to be converted to synthetic coal gas or synthetic coal liquid (Oil and Gas Conservation Act, section 1(1)(oo)).

porosity

The effective pore space of the rock volume determined from core analysis and well log data measured as a fraction of rock volume.

pressure (initial)

The reservoir pressure at the reference elevation of a pool upon discovery.

propane

In addition to its normal scientific meaning, a mixture mainly of propane that ordinarily may contain some ethane or butanes (Oil and Gas Conservation Act, section 1(1)(rr)).

R

In gas pools, the fraction of the in-place resources of gas expected to be recovered under the subsisting recovery mechanism.

recovery (primary)

Recovery of oil by natural depletion processes only, measured as a volume that is recovered or as a fraction of the in-place oil.

refined petroleum products

End products in the refining process.

refinery light ends

Light oil products produced at a refinery; includes gasoline and aviation fuel.

refinery utilization

Refinery utilization shows the ratio of throughput to capacity.

remaining established reserves

Initial established reserves less cumulative production.

reprocessing facilities

Gas processing plants used to extract ethane and natural gas liquids from marketable natural gas. Such facilities, also referred to as straddle plants, are located on major natural gas transmission lines.

reservoir

A porous and permeable underground formation containing an individual and separate natural accumulation of producible hydrocarbons (oil or gas) that is confined by impermeable rock or water barriers and is characterized by a single natural pressure system.

S

A volume of gas transacted in a time period. This gas may be augmented with gas from storage.

saturation (gas)

The fraction of pore space in the reservoir rock occupied by gas upon discovery.

saturation (water)

The fraction of pore space in the reservoir rock occupied by water upon discovery.

shale gas

The naturally occurring gas produced from organic-rich, fine-grained rocks.

shale NGLs

The naturally occurring mixture of natural gas liquids produced from organic-rich, fine-grained rocks.

shale oil

A naturally occurring mixture of mainly pentanes and heavier hydrocarbons produced from organic-rich, fine-grained rocks.

shrinkage factor (initial)

The volume occupied by one cubic metre of oil from a pool measured at standard conditions after flash gas liberation consistent with the surface separation process and divided by the volume occupied by the same oil and gas at the pressure and temperature of a pool upon discovery.

solvent

A suitable mixture of hydrocarbons ranging from methane to pentanes plus but consisting largely of methane, ethane, propane, and butanes for use in enhanced-recovery operations.

specification product

Ethane, propane, butanes, or pentanes plus that have been processed (fractionated) to a condition where they meet purchaser specifications for product quality.

steam-assisted gravity drainage (SAGD)

A method of in situ recovery where steam is injected into a horizontal well to heat the bitumen in a reservoir and allow it to flow; gravity pulls the heated bitumen to a second horizontal well positioned below the first and the bitumen is then produced to the surface.

An administrative geographical boundary used in relation to potential resource accumulations.

strip ratio

The amount of overburden that must be removed to gain access to a unit amount of coal. A stripping ratio may be expressed as (1) the thickness of overburden to the thickness of coal, (2) the volume of overburden to the volume coal, (3) the weight of overburden to the weight of coal, or (4) the cubic yards of overburden to tons of coal. Stripping ratios are commonly used to express the maximum thickness, volume, or weight of overburden that can be profitably removed to obtain a unit amount of coal.

successful wells drilled

Wells drilled for gas or oil that are cased and not abandoned at the time of drilling.

T

The initial reservoir temperature upon discovery at the reference elevation of a pool.

tight gas

Tight gas is gas trapped in the pores and fractures of low-permeability rocks. Producing tight gas requires extra stimulation, such as hydraulic fracturing.

tight hybrids

Tight hybrids are low-permeability oil or gas resources. They cannot be easily divided into “conventional” and “unconventional” resources by factors such as viscosity, degree of permeability, or recovery process.
This definition applies to “halo” deposits where the quality of the reservoir decreases with increasing distance from the conventional core and to mixed-lithology reservoirs containing both conventional and unconventional deposits.

tight oil

Tight oil is crude oil trapped in the pores and fractures of low permeability rocks and is generally liquid under reservoir conditions. Producing tight oil requires extra stimulation, such as hydraulic fracturing.

U

ultimate potential

An estimate of the initial established reserves that will have been developed in an area by the time all exploratory and development activity has ceased, having regard for the geological prospects of that area and anticipated technology and economic conditions. Ultimate potential includes cumulative production, remaining established reserves, and future additions through extensions and revisions to existing pools and the discovery of new pools. For hydrocarbons, ultimate potential volumes can be determined by the following simple equation: ultimate potential = initial established reserves + additions to existing pools + future discoveries.

upgraded bitumen

A mixture of hydrocarbons, similar to crude oil, derived by upgrading bitumen from oil sands. Generally considered to be equivalent to synthetic crude oil (SCO) but can also include refined petroleum products.

upgrading

A process that converts bitumen and heavy crude oil into a mixture of lighter hydrocarbons by removing carbon or adding hydrogen.

W

well

A hole drilled in the earth in order to find or produce natural gas or crude oil.

wells placed on production

Wells that have been physically connected to gathering infrastructure and are reporting production; includes newly drilled wells that have been placed on production and recompletions into new zones of existing wells.

Western Canadian Select (WCS)

A grade of heavy crude oil derived from of a mix of heavy crude oil and crude bitumen blended with diluents. The price of WCS is often used as a representative price for Canadian heavy crude oils.

West Texas Intermediate (WTI)

A light sweet crude oil that is typically referenced for pricing at Cushing, Oklahoma.

Z

PSAC Areas

The Petroleum Services Association of Canada (PSAC) has sectioned Canada into a number of geographic regions based on the predominate type of geological interest to the oil and gas industry. Figure AA.1 [Tableau] shows the PSAC areas in Alberta. The AER often refers to the historical, current, and future oil and gas activity it discusses by PSAC area.